Report: City Should Stay on at Beale

By Amos Maki

The city of Memphis should maintain ownership of its properties on Beale Street and create an autonomous board or hire a new development and management company to guide its future, according to a detailed report on the iconic street.

A detailed report on Beale Street recommends that the city of Memphis should maintain ownership of its properties on the street.

(Daily News File/Andrew J. Breig)

The previously undisclosed report, the result of months of study by a 31-member committee appointed by Memphis Mayor A C Wharton Jr. in 2010, will act as a roadmap for city leaders as they ponder just what to do with the entertainment district that attracts more than 1 million visitors a year.

“It’s a great resource, and it will be very helpful so we don’t have to start from scratch,” said Wharton. “I’ve said all along and I stick with it that the city of Memphis will not be running Beale Street. I’m not good at running a bar or making gumbo, so we’re going to get folks who are good at doing that sort of thing.”

Wharton appointed the committee as the city entered settlement negotiations with John Elkington and Performa Entertainment Real Estate, which turned the four-block strip of restaurants, clubs and shops into the world-famous Beale Street Entertainment District. The report was kept under wraps while Elkington and the city continued settlement negotiations and Performa navigated a bankruptcy filing.

But the settlement has been finalized and the Downtown Memphis Commission took the reins of Beale Street on a temporary basis Jan. 1, the first time in more than three decades that someone other than Elkington was in charge of the famed district.

"A Framework for the Future of Beale Street" report

The committee made two recommendations for the future long-term governance of Beale Street: create a Beale Street Business Improvement District similar to the Downtown Memphis Commission or hire a new management and development firm.

“When I go to the council and ask to set up a mechanism to work with for the future, we don’t want a situation where me and 13 (council members) are deciding what time the clubs close and what type of music they play,” Wharton said.

The proposed business improvement district could be enabled by existing state law and established by city ordinance. The organization’s city-appointed board would be responsible for selecting an executive director, and basic operational and management responsibilities for Beale Street could be bid out to private providers.

If the city chooses to bring in a private manager or developer, it could select one through its regular request-for-proposal system, according to the report. The firm could operate through a lease arrangement with the city and be subject to regular city reviews.

The report suggests that whoever is ultimately tapped to lead the district should work with a new nonprofit “for the purpose of protecting and presenting Beale Street’s history.” The report said the entity that was supposed to be responsible for doing that, the Beale Street Development Corp., “has failed to live up to its potential as the protector and presenter of the district’s history.”

A 52-year agreement signed in 1982 gave BSDC the master lease for the district, and BSDC sublet the development and management of the properties to Performa. The report said if the city selects a new private business to run the district that the initial term last no more than five years.

“At least in the event of unsatisfactory performance or differences of opinion relating to management and operations, the managing entity could be replaced at the end of the initial agreement,” the report states.

The report dismissed the idea that the city should sell its Beale Street properties, saying it could hinder future development or lead to businesses that stray from the district’s established character.

The report also sheds new light on Beale Street finances and the funds Elkington will receive in future years under the settlement.

The report said Beale Street businesses generate $30 million to $40 million in gross annual sales. Based on those amounts, the report said rents paid by businesses utilizing city-owned properties amount to roughly $1.4 million a year, funds that must be used for Beale Street’s expenses, including operations, capital costs and building maintenance and repairs. Elkington has long said that there were little to no Beale Street funds left after the street’s expenses were paid.

The settlement agreement between the city and Performa allows Elkington to continue to collect 5 percent commissions on leases the company signed until 2034. The report said that amounts to around $50,000 annually.

The report makes multiple references to promoting the historical importance of Beale Street, which for years served as the center of African-American business and culture, and Wharton vowed that the “Home of the Blues” would always be mindful of its roots. “If you want to be authentic you have to preserve your history,” Wharton said. “We strayed when we allowed Beale Street to deteriorate. And I am vowing to never allow that to happen again, and we will spend just as much time on capturing and promoting the history as we do on designing entertainment and development opportunities.”